Elpida Renews License Agreement with Rambus

Elpida, the largest supplier of dynamic random access memory in Japan, on Monday renewed its cross-licensing agreement with Rambus, a developer of memory and interface technologies. For some reason, Elpida also decided to pay Rambus for GDDR5 memory technology, a type that is not believed to be covered by Rambus patents and for which no other company pays a license fee.

This agreement new agreement between Elpida and Rambus covers Elpida’s range of memory products including SDR, DDR, DDR2, DDR3, LPDDR, LPDDR2, GDDR3 and GDDR5 dynamic random access memory (DRAM). Other memory suppliers and manufacturers do not pay Rambus for GDDR5 memory type and it is a surprise that Elpida decided to license the technology developed by JEDEC-led committee from the company that has not been with the standard-setting body for over a decade. GDDR5 is substantially different from DDR, DDR2 and DDR3 memory technologies that power previous-gen GDDR memory series.

As a result of the patent license agreement with Elpida, Rambus revised its revenue guidance for the quarter to be between $85 million and $93 million. Rambus initially provided revenue guidance for the quarter in the range of $40 million and $50 million.

“The Elpida agreement is estimated to result in royalty payments of $180 million to Rambus over the next five years, including $47 million to be paid in the current quarter. With this agreement, we now have more than half of the DRAM market licensed, providing system manufacturers more choices of supply for licensed DRAM products,” said Harold Hughes, president and chief executive officer of Rambus.

Rambus recently launched another series of attacks onto open-standard interface technologies, such as DisplayPort, PCI Express, Serial ATA, Serial Attached SCSI. The company accused a number of semiconductor manufacturers, including Broadcom Corp., Freescale Semiconductor., LSI Corp., MediaTek, Nvidia Corp. and ST Microelectronics and demanded the U.S. trade commission to halt sales of their chips that infringe its patents as well as products powered by those chips. Apparently, the company wants to stop sales of almost all electronics available today, including personal computers, workstations, servers, routers, mobile phones and other handheld devices, set-top boxes, Blu-ray players, motherboards, plug-in cards, hard drives and modems.